Complete Guide to Customs Terms and Procedures

An international customs document designed to simplify customs procedures for the transit and temporary importation of goods between signatory countries.

Transferring ownership of goods to CBSA (Canada Border Services Agency) for destruction or disposal, in lieu of paying duties and taxes. This is a similar action that CBSA may take after goods have been seized.

Providing a report of imported goods to CBSA (Canada Border Services Agency) under Section 32 of the Customs Act.

Duty calculated as a percentage of the customs value of imported goods.

An additional duty levied under the Special Import Measures Act, designed to offset the potentially injurious effects of selling goods to Canadian or American importers at prices below production cost, below selling price in the exporting country, or at a loss, thereby protecting domestic producers.

A duty levied under the Special Import Measures Act on subsidized goods, the importation of which is found to be causing, threatening to cause, or likely to cause material injury to Canadian production of like goods.

International and European agreement for the carriage of dangerous goods by road.

Duty levied on spirits, wine, beer, and tobacco products as stipulated under the Excise Act and the Excise Act, 2001.

Duty levied on goods at the rates specified in the Customs Tariff.

Transport document used by airlines for air shipments.

For goods valued at no more than CAD $1,600 (Canadian funds), CBSA will accept the shipper's own commercial invoice document. Sometimes also called a "Pro Forma Invoice." The CI can also replace or supplement the CCI as long as it contains all required data elements. Note: Depending on context, the term "CI" may also refer to a Customs Inspector.

A form detailing all CBSA-relevant shipment information. While the actual form is no longer mandatory, all data elements contained in the CCI must be provided for shipments valued over CAD $1,600 (Canadian funds).

Required form when applying for preferential tariff treatment. Must be completed by the exporter of the goods.

Component of GPT. This statement can replace Form A Certificate of Origin.

See BOL - Bill of Lading.

A written statement issued by CBSA under Section 43.1(1)(c) of the Customs Act regarding the tariff classification of a product.

This computer system electronically transmits cargo release information to CBSA.

CBSA line release program implemented at international airports, allowing release information to be submitted to customs before the actual arrival of cargo.

An adjustment process to correct errors in the B3 entry when additional duties and taxes are payable, or to correct a "no revenue impact" (no additional payment outcome). Also see Refund. A properly completed B2 form (i.e., Canada Customs Adjustment Request) must be submitted within prescribed time limits.

A civil penalty system designed to ensure compliance with customs legislation through the imposition of monetary penalties.

From the time the carrier's cargo manifest is transmitted electronically to customs, AMS controls imported goods until control is transferred to another part of the Automated Commercial System (ACS).

CBSA accelerated release system designed for importers handling large volumes of low-risk goods (such as bulk commodities).

An independent administrative tribunal responsible for hearing and making determinations on appeals under Section 67 of the Customs Act.

A voluntary joint effort between U.S. Customs and Border Protection and businesses importing goods into the United States. Companies certified under C-TPAT must have documented processes for identifying and mitigating risks throughout their international supply chain. This lowers the company's risk profile, leading to faster cargo processing, including fewer customs inspections.

Category code indicating the basic rate, used in the Rate Class box of an Airway Bill.

CBSA form used to adjust a B3 entry (e.g., to apply for a refund of duties paid upon import, to appeal under the Customs Act or other legislation, and to amend the B3 entry).

The primary CBSA import accounting document, also known as the "accounting document" or simply the "entry." This form details all applicable information related to the import transaction (e.g., tariff classification, tariff treatment, country of origin, quantity, value, applicable duties, taxes, etc.). In practice, hard copy B3 forms are no longer submitted to CBSA; all data is transmitted electronically. However, paper forms may be printed in hard copy for billing and client information purposes.

An automated 24/7 telephone service operated by CBSA to receive calls and provide general customs information.

To simplify the processing of import transactions, all businesses dealing with the Canada Revenue Agency (CRA) and CBSA must have a Business Number. To obtain a Business Number, call 1-800-959-5525 (if calling from outside Canada, call 613-941-0100).

A carrier that has posted security with CBSA and is permitted to transport goods under CBSA control between points in Canada that are liable for duty but on which duty has not been paid.

A place licensed by the Minister for the storage of goods on which duty has not been paid.

A CBSA officer responsible for determining whether people and/or goods may enter Canada.

Category code for a Specific Commodity Rate (SCR), used in the Rate Class box of an AWB.

The government agency responsible for collecting taxes.

A CBSA streamlined accounting and payment program under which approved applicants, who have made investments in their business systems and customs compliance, use their own business systems to account for their goods, to initiate trade data reporting, and to self-assess duties and taxes owed.

Duty levied on goods at the rates specified in the Customs Tariff.

A form generated by CBSA to adjust information originally reported to CBSA about goods (e.g., changes to tariff classification or valuation of imported goods). A DAS may be "revenue" or "non-revenue" type depending on whether additional duties and/or taxes are determined to be payable to CBSA.

The seller/exporter/manufacturer clears the goods for export and is responsible for delivering the goods to the named terminal at the port or place of destination.

An international trade term where the seller/exporter/manufacturer clears the goods for export at their expense and is responsible for making the goods available to the buyer at the named place of destination, cleared for import.

An international trade term where the seller/exporter/manufacturer clears the goods for export at their expense and is responsible for making the goods available to the buyer at the named place of destination, not cleared for import.

The seller/exporter/manufacturer is responsible for making the goods available to the buyer at the named port of destination, not cleared for import. Therefore, the seller is responsible for all costs to bring the goods to the named port of destination before unloading.

An international trade sales term where the seller/exporter/manufacturer clears the goods for export at their expense and is responsible for making the goods available to the buyer on the quay (wharf), not cleared for import.

The value on which applicable GST (or HST) is calculated. DPV is the total of the value for duty (in Canadian currency) plus applicable Canadian import duties and any anti-dumping or countervailing duty assessments.

A special CBSA program to refund duties paid under specific conditions, most commonly upon export of the goods.

The Duties Relief Program allows for relief from duties on imported goods that will eventually be re-exported. There is an application process, and specific criteria must be met to qualify.

Relief from most duties on imported goods that are ultimately exported, whether or not further processed in Canada. This is part of the Duties Relief Program.

Category code indicating a rate over a certain weight, as used in the Rate Class box of an AWB.

CBSA document used to report and control goods temporarily entering Canada under provisions for temporary importation. Also informally referred to as Temporary Importation.

Computer-to-computer transmission of information between shippers, importers, brokers, carriers, and CBSA. EDI is broad in scope, and its application in the customs environment continues to expand.

A regional trade organization established in 1960 by the Stockholm Convention as an alternative to the common market.

Allows for reduced tariff rates on imported goods for specific uses.

A tariff rate expressed in dollars or cents per unit.

A Statement of Origin can be used to claim NAFTA preference for goods valued under CAD $1,600 when a formal NAFTA Certificate of Origin is not required.

A privately owned and operated facility authorized by CBSA for the control, short-term storage, and examination of bonded goods until released by CBSA or exported from Canada.

An additional duty levied as a temporary emergency measure, typically on imported goods that are causing or threatening to cause serious injury to Canadian producers of like or directly competitive goods.

The 10-digit number assigned to a good enumerated in the Customs Tariff to identify an imported good. The first six digits represent the International Harmonized System (HS) code, the seventh and eighth digits are the customs subdivision, and the remaining two digits are the statistical suffix used by Statistics Canada.

A legal document provided by an importer to a customs broker authorizing the broker to act on the importer's behalf in customs and excise-related matters. Also called a Power of Attorney (POA) or "PA" form.

Both a multilateral trade agreement aimed at expanding international trade and the organization that oversaw that agreement.

A special bill of lading used for shipments by the U.S. government.

Under the General Tariff, goods imported from the few non-WCO member countries or countries with no other trade agreement with Canada are subject to a 35% duty.

Authorizes the importation of controlled goods listed in the Import Control List without a separate import permit issued by the Department of Foreign Affairs and International Trade.

Rules for the classification of all goods in the Harmonized System.

A special tariff provision under which eligible goods exported to Canada from developing countries receive reduced, preferential duty rates.

A federal sales tax levied on most goods and services on a "value-added" basis, including goods imported into Canada.

The Harmonized System is an international customs classification system currently used by most trading nations worldwide, including Canada, the United States, and Japan. It is administered by the World Customs Organization (WCO). The first six digits of the HS number are used for the international classification of goods (e.g., 8471.50), and the remaining digits provide classification information for the importing country (i.e., for statistical or tariff assessment purposes). Also called Tariff Item; HS; HS Code.

A combination of provincial and federal sales taxes (PST and GST) in certain provinces. This tax is not applied to commercial goods at import but may apply to certain services provided in participating provinces (Ontario, British Columbia, Newfoundland and Labrador, Nova Scotia, New Brunswick). The applicable HST rate varies by province.

An import shipment valued at over CAD $1,600 (Canadian funds).

A trade association serving airlines, passengers, shippers, travel agents, and governments.

Incoterms make international trade easier and help traders in different countries understand each other. These standard trade definitions are most commonly used in international contracts and are copyrighted by the ICC.

CBSA line release program applied at inland sufferance warehouses.

Security filed with U.S. Customs to cover the "in bond" movement of goods from one location to another when the final destination is not in the United States (e.g., goods moving from Mexico through the United States to Canada under customs control).

A refund claimed by GST-registered businesses for GST or HST paid or payable on goods and services. Administered by the Canada Revenue Agency.

A management theory based on reducing inventory (i.e., "producing the necessary items in the necessary quantities at the necessary time"). The prevalence of JIT manufacturing highlights the need for fast, increasingly efficient release and clearance processes, especially those involving EDI.

Category code indicating a per-kilogram rate, used in the Rate Class box of an AWB.

CBSA form number for a high-level appeal to the President of CBSA (i.e., a request for a re-determination of tariff classification or a re-appraisal of value).

CBSA-issued accounting statement form number used by customs brokers to reconcile consolidated duty and tax remittances.

A document issued by a bank indicating that the bank will pay a certain amount to someone (the supplier/exporter/seller) on behalf of the buyer (importer).

Tariff treatment extended by the United Nations to countries requiring special attention due to their economic status.

Most road freight transported by common carriers is LTL. Similarly, the term LCL applies to ocean freight for "Less than Container Load."

Also called Courier Low Value Shipment. A CBSA entry program providing expedited processing for courier shipments valued under CAD $2,500.

Category code indicating the minimum charge, used in the Rate Class box of an Airway Bill.

A manifest is the initial record of goods arriving in Canada, enabling CBSA to control the movement of imported and exported goods. (See also Cargo Control Document)

Certain goods determined under Section 19 of the Customs Tariff must be marked with the country of origin. Marking refers to the country of origin and should not be confused with labeling, which refers to consumer packaging and labeling.

Most-Favored-Nation tariff treatment applies to goods imported into Canada from all other countries (unless they also qualify for preferential tariff treatment under a free trade agreement such as NAFTA).

This is a user fee charged by U.S. Customs on each shipment imported into the United States. However, MPF does not apply to NAFTA.

Preferential tariff treatment extended to goods originating in Mexico and meeting NAFTA rules of origin.

NAFTA preferential tariff treatment extended to commercial goods jointly produced in Mexico and the United States.

Category code indicating the normal 1 kg general cargo rate, used in the Rate Class box of an Airway Bill.

A trilateral free trade agreement between Canada, the United States, and Mexico signed on January 1, 1994, aimed at phasing out tariffs on most goods over 10 years. For an importer to claim NAFTA tariff preference, the exporter must provide a NAFTA Certificate of Origin for products meeting the specific "rules of origin" applicable to the goods in question.

Not Elsewhere Specified indicates that certain types of the good are specified under another product number.

See BOL - Bill of Lading.

This term refers to government departments other than CBSA (e.g., CFIA - Canadian Food Inspection Agency) that impose import restrictions or documentation requirements administered by CBSA on the importation of certain goods.

A legal instrument made by the Governor in Council under statutory authority or (less commonly) royal prerogative.

See GAA - General Agency Agreement.

A customs release system used to clear goods before they arrive in Canada.

Partners in Protection (PIP) is a voluntary program of the Canada Border Services Agency (CBSA) that seeks the cooperation of private industry to enhance border and supply chain security, combat organized crime and terrorism, and help detect and prevent smuggling of contraband. Member companies are viewed as trusted traders, enabling CBSA to focus its resources on higher-risk or unknown areas.

Where persons entering Canada report themselves and their goods.

The port where goods are unloaded from the shipping line, not to be confused with what may be a more inland destination.

The port where goods are loaded onto the ship.

The total of all payments made or to be made directly or indirectly by the buyer to or for the benefit of the seller.

See BSO.

Goods that cannot legally be imported into Canada under any circumstances.

Duty levied under the Special Import Measures Act when CBSA makes a preliminary determination of dumping or subsidizing of imported goods.

Category code indicating a rate for 45 kg (100 lbs) and over, used in the Rate Class box of an AWB.

Category code indicating that a reduced class rate has been applied, as used in the Rate Class box of an AWB.

An importer may apply for a refund of duties and taxes on commercial goods, including SIMA duties paid, GST, and/or HST. A properly completed B2 Canada Customs Adjustment Request must be submitted within prescribed time limits. While refunds of GST/HST are noted on the B2 form, the refund is not part of the CBSA B2 program.

Authorization to remove goods from a CBSA office, sufferance warehouse, bonded warehouse, or duty-free shop for use in Canada.

Forgiveness of all or part of the duty under Section 115 of the Customs Tariff Act or Section 23 of the Financial Administration Act, under specific conditions.

This company is contracted by Transport Canada to establish and operate a national vehicle inspection and certification program.

An importer or broker provides financial security to the Canada Revenue Agency, allowing for customs release by initially submitting minimum documentation (i.e., cargo manifest, commercial invoice and/or CCI, and any permits or certificates required by other government departments).

A fee usually charged for the use of a trade name or brand.

See Advance Ruling.

Category code indicating that a surcharge rate has been applied, as used in the Rate Class box of an Airway Bill.

Reserve assets of International Monetary Fund member countries from which a member may withdraw a predetermined amount of Special Drawing Rights (SDRs) according to its quota with the IMF.

A sum of money or bond posted to guarantee payment of duties and taxes owed on imported goods.

Legislation that gives the authority to levy anti-dumping or countervailing duties on goods found to be "dumped" or "subsidized" and to take retaliatory action. See ADD - Anti-Dumping Duty.

A form used by a shipper to authorize a carrier to issue a bill of lading or airway bill on the shipper's behalf.

An international trade term where the seller/exporter/manufacturer clears the goods for export at their expense and then places them alongside the vessel at the named port of shipment.

A joint Canada-U.S. initiative that allows pre-approved importers, carriers, and registered drivers to expedite the border clearance of pre-approved, eligible goods.

The seller/exporter/manufacturer clears the goods for export and delivers them to the carrier nominated by the buyer at the named place of delivery.

CBSA accelerated release system designed for importers handling large volumes of low-risk goods (such as bulk commodities).

The seller/exporter/manufacturer is responsible for delivering the goods past the ship's rail at the named port of shipment, bearing costs and risks until that point.

Canada has signed several agreements allowing duty-free import of certain goods from specific countries, including the Canada-Chile Free Trade Agreement (CCFTA); Canada-Costa Rica Free Trade Agreement (CCRFTA); Canada-Israel Free Trade Agreement (CIFTA); North American Free Trade Agreement (NAFTA); Canada-Peru Free Trade Agreement (CPFTA); etc.